Standard Bank has established a significant Shari’ah offering in one of the fastest growing and top-performing subsectors of the global banking industry, with past double-digit growth predicted to continue into the future.
With its vision to drive Africa’s growth through sustainable and inclusive economic development, Standard Bank sees Shari’ah Banking as one of the ways in which it can bring responsible and sustainable banking solutions to the various African countries in which it operates.
“We are looking to scale our business across the bank’s operations in all the geographies in which we have representation,” says Ameen Hassen, Head of Shari’ah Banking. This also aligns with the group’s purpose of Africa is our home, we drive her growth.
The Standard Bank Group is the largest bank in Africa by assets, with a significant presence in 20 countries on the continent. “With about half of Africa’s population identifying as Muslim and the faith of Islam being practiced in the majority of African countries, we believe there is latent demand for Shari’ah financial products and services,” says Ameen.
Non-Muslims not excluded
That said, Shari’ah banking is open to everyone. “The naming convention sometimes leads to the misconception that only Muslims qualify for Islamic banking products and services,” says Hassen. “For this reason Nigeria has renamed it Non-Interest Banking.”
He says although customers cannot be asked to declare their faith, Standard Bank estimates that its South African Shari’ah book is about 35% non-Muslim. “In the end, the Shari’ah banking proposition either resonates with you or it doesn’t.”
What differentiates Shari-ah-compliant products
Hassen explains that saying that Shari’ah Banking is ethical does not imply that conventional banking is not. “Islamic Banking complies with Islamic law or Shari’ah, which includes certain strict principles that do not apply to conventional banking.”
There is a prohibition on interest (riba). “It is an economic principle rooted in the Qur’an. Interest is generally charged in conventional transactions as money is viewed as an asset or a store of value in economic terms,” he says. “Shari’ah doesn’t view money in its current form as an asset or a store of value; and as a consequence, you cannot buy or trade in something that doesn’t have an intrinsic value.”
Then there is an avoidance of excessive uncertainty (gharar). Conventional banking allows for speculative contracts, while Islamic banking looks for absolute transparency and as much certainty as possible.
Lastly, there is the qualitative screen. “Shari’ah banking does not allow for investment in industries, such as, alcohol, gambling, arms and pork-related products,” says Hassen.
What is next?
“The universe is converging and we are seeing so many different moving parts,” says Hassen. “More and more people are using environmental, social and governance (ESG) criteria to evaluate the long-term sustainability and ethical impact of their banking products and services.
“As society, technology and the world in general evolve, banking needs much innovation to keep up with the rate of change.”
Hassen says that innovation is key to this finance subsector with a strong emphasis on product development. He has been instrumental in developing Shari’ah-compliant products including the first Shari’ah-compliant Diners Club product in the world, and the first Shari’ah-compliant personal charge card in South Africa; the first Shari’ah-compliant unsecured working capital facility that allows a merchant to obtain funding in under 48 hours; and the first Shari’ah-compliant tax-efficient endowment product in the market.
Room for growth starting in South Africa
Shari’ah Banking’s share of the South African financial market is small. In South Africa, deposits amounted to R83 billion in 2024, with assets under management amounting to R36 billion. The combined total of more or less R120 billion accounts for between one to two percent of total banking assets in South Africa.
Hassen combines passions
Standard Bank couldn’t have chosen a better qualified person to head up their Shari’ah Banking division. Hassen joined Standard Bank’s Private Banking Division in 2013 and two years later was promoted to lead the development and setup of a Shari’ah banking division.
“Shari’ah banking is the perfect intersect between religion, finance and economics,” says Hassen, who has been involved in the corporate financial industry since 2007 and has a strong foundation in traditional Islamic studies and Arabic. He had memorised the Qur’an in Arabic by the age of 14.
“Most of my studies were rooted in Islamic finance,” he says. His comprehensive list of qualifications starts with undergraduate studies at UNISA in economics and Islamic studies; a diploma in Islamic banking from the Chartered Institute of Management Accountants; and a post-graduate diploma in Islamic finance and banking from Regent Business School. In addition, Hassen has completed the Certificate Islamic Finance Executive Programme from the Ethica Institute of Islamic Finance; as well as Stanford University’s Corporate Venturing and Innovation Programme.
About Standard Bank’s Shari’ah Banking
While the Shari’ah Banking Division falls under the Personal and Private Banking business unit at Standard Bank, it has been set up as a group capability and operates across the groups business units and geographies. Here is a list of its Shari’ah-compliant offerings:
• Personal Banking
– Fixed deposit
– Call account
– Diners Club charge card
• Business Banking
– Fixed deposit
– Transactional accounts
– Call accounts
– Notice deposits
– Forward exchange contracts
– Merchant capital cash advance
– Fleet management
– Commercial property finance
– Vehicle and asset finance
– Treasury/cash management
• Will trusts and estate planning
• Corporate advisory services
Industry recognition for Standard Bank’s Shari’ah Banking
Even though the business unit was established less than a decade ago, it has already garnered several international and local awards.
2024 Euromoney Islamic Finance Awards
• Africa’s Best Islamic Bank
• South Africa’s Best Domestic Islamic Bank
• Groundbreaking deals recognised:
– Islamic Finance Deal of the Year, Africa: Federal Government of Nigeria NGN150 billion *sukuk
– Best Islamic Project Finance Deal, Africa: Lagos State Government NGN19.8 billion Ijara lease sukuk
– Best Islamic Local Currency Deal and Global: Republic of South Africa R20.4 billion inaugural rand-denominated sukuk.
*A sukuk is an Islamic financial certificate, similar to a bond in conventional finance, that complies with Islamic religious law or Shari’ah. Unlike conventional bonds, which represent debt obligations and involve interest payments, sukuks represent ownership in underlying assets, projects or business activities.
2024 Global Islamic Finance Awards
• Excellence Award for Islamic SME Banking
This award recognises the bank’s dedication to providing innovative and ethical financial solutions aligned with Shari’ah principles.
2024 PMR Diamond Arrow Awards
• Top honours in Business Banking, Personal Banking and Asset Management